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- 10 ways IT departments waste money
- Resolving Conflict in Work Teams
- ERP system brews business benefits for coffee shop
- Why corporate IT will eventually embrace cloud computing
- Unrealistic project estimates: The IT consultant as an enabler
- Three years optimal time to refresh hardware
- Social networks offer SMBs marketing power
- SMBs yet to make right IT investments
- Plan IT purchases carefully ahead of upturn
- India's SMBs to spend US$291M on security in 2009
Unrealistic project estimates: The IT consultant as an enabler
Here’s an all too familiar scenario:
The client calls and says, “We need to add this small feature to our application. How long will it take?” You respond that you need to draw up some requirements and talk to users, but Bob counters, “Oh, just give me a ballpark estimate.” The gears start turning in your brain as you imagine implementing the feature as described. Your natural optimism thinks you could complete the work in three days, but you know you can be overly optimistic, so you answer, “Two weeks.” Guess what? You’re still short. You forgot these important factors:
- Requirements. Your client contact, whether they’re the CEO, CIO, project manager, or whomever, cannot have a complete picture unless she or he is the only user — and even then it’s dicey. Besides, there’s no guarantee that what you took from their brief description even matches what they meant.
- Design. You don’t want to jump in and start cowboy coding without a proper design of each component. I’m not talking about flowcharting everything or generating piles of UML that nobody will ever read again; your design needs to be flexible but well thought out. Even though this seems like it adds time to the project, failing to do this step adds even more time in the long run.
- Testing. I’m a big believer in writing your tests before you write the code to satisfy them — or at least, in parallel. This is another step that saves you time down the road.
- Iterations. No matter how well you define the requirements up-front, somebody will forget something important or something nobody even knew. You need to build in time for providing prototype versions so the client can use the product and provide feedback that drives new requirements.
- Documentation. A system that isn’t documented will be reinvented. If you want the project to have any shelf life, you need to provide usage instructions for people you may never meet and put enough comments in the code that you’d be able to understand it even if you hadn’t written it.
- Training. No matter how well you write, users may not be able to grok what’s going on without some personal guidance.
Taking shortcuts that cost more time in the long run
Consultants often leave out some or all of the above steps in an attempt to provide results quickly. Bob may be impressed when he gets the new feature in less than a week, but pretty soon, he’ll find out that the project isn’t quite done yet. In fact, you’ve only completed the first iteration, and even that was half-baked. The project will probably drag on for months or even years, as you tweak the features, fix the bugs, and give the users the same instructions over and over again.
So, why do consultants take shortcuts that make the journey longer? Here are four reasons:
- Client pressure. Bob wants you to give him a low number, so he can justify the work. You don’t want to disappoint Bob, and you want him to approve the project.
- Competition. If you aren’t the only bidder on the project, you want to be the lowest bidder so you get the gig.
- Hubris. No matter how much you pad an ad hoc estimate, it still isn’t worth the air that it’s written on. But once you’ve stated a number, your pride and your standing with the client won’t let you admit that you were wrong. So you cut corners.
- Pure evil. Some consultants get the client on the hook by intentionally engineering the project to require follow-up work after it’s “done.” Those consultants give the rest of us a bad name.
Fending off pressures to give ad hoc estimates
First, consultants have to be aware that these pressures exist. When I was a newbie consultant, I had no idea why projects always took longer than expected — my estimate always seemed reasonable to me at the beginning. Learn from past projects — what went well and what didn’t, both in your experience and in the experiences of others.
Second, consultants have to educate clients on what a well-executed project requires. Clients need to understand that by taking a month instead of a week, they’ll get a finished product that meets their needs instead of one that does exactly what they said but not what they meant. And even if it does require modifications after delivery, they’ll be easier to implement without breaking something else.
Third, consultants should not give ad hoc estimates. If your client won’t stop bugging you until they get one, then say, “sometime between a month and 10 years” because frankly, that’s about as precise as you can be without more information. Instead, you should push for approval of an exploratory project to establish requirements and compute a decent estimate.
Building a reliable reputation
Unfortunately, because so many self-styled consultants are willing to cut corners, they’ve set the expectations in clients’ minds about what estimates mean. The more intelligent clients have come to expect that the project estimate will be far less than what’s really required when all is said and done. So when they receive a more accurate estimate, they’re likely to think that the actual timeframe for having something usable will be much longer. You need to build a track record of reliability before your client can trust your prognostications.
Three years optimal time to refresh hardware
Because cash flow and access to capital are tight during the current economic uncertainty, extending the life of current hardware systems is a strategy that small and midsize businesses (SMBs) cannot afford to ignore. They cannot overlook the inevitability of a refresh as well.
According to Ronnie Lee, Lenovo's Singapore country general manager, the key lies in knowing how to keep hardware running at an optimal level right to the point at which a replacement becomes necessary. In an e-mail interview, Lee noted that the majority of case studies determine that the optimal time to replace or refresh systems is at about three years. Khoo Teng Guan, Dell Computer's SMB general manager, reiterated that it is important for SMBs to take a long-term view and carefully consider the consequences of ending up with inefficient equipment that can cost more to manage.
"Look for SMB-centric services bundled with your hardware. A unique challenge for SMBs is the lack of dedicated IT staff to set up and manage their IT needs. Services are available that give SMBs similar functionality that IT departments in larger companies enjoy, and SMBs would do well to look into these when shopping around for technology."
Simply keeping the existing data center, desktops and portable PCs running way beyond their expected lifespan, may be thought to be the most logical way to save in these times. Yet, if not evaluated and acted upon properly, doing so will definitely impact power and cooling bills, business continuity and downtime," Khoo said in an e-mail interview. In fact, as systems age, servicing them becomes too costly, he noted. "For every $1 spent on hardware, businesses are paying $4 on management and maintenance. That's when investing in new, higher-performing, more reliable and energy-efficient solutions starts to make sense," he explained. Citing lifecycle costs of mobile computers, Saumer Phukan, Intel's Asia-Pacific platform marketing manager for business clients, said the cost of maintaining aging machines can cost the same as purchasing a new one.
Phukan referred to research published in April by J. Gold Associates, which found that wear-and-tear increases failure rates of notebooks by 50 percent of the initial failure rate at Year 3, 100 percent at Year 4, and 170 percent at Year 5 of the machine's lifespan. This means that if the failure rate in the first year is 12 percent, this will increase to 18 percent when the machine reaches its third year of operation. By its fourth year, the laptop's failure rate is 24 percent, which is equivalent to 100 percent of its failure rate in its first year of opeartion. "As a result, when looking at notebook PC lifecycle costs, the cost of maintaining aging machines is approximately equivalent to buying a new one," Phukan said in an e-mail.
Concentrate on business, not maintenance
At a point when the cost and time needed to maintain a machine are higher than the returned benefits, it is no longer beneficial to prolong its use, said AMI-Partners' research analyst, Vu-Thanh Nguyen. "If the current system limits employee productivity, it is time to stop maintenance and get a new system," Nguyen said in an e-mail. "More importantly, when competitors are investing in new hardware and software that gives them a competitive edge, failure to invest in IT could lead to business failure." Echoing the same sentiments, Dennis Mark, Hewlett-Packard's Asia-Pacific and Japan vice president and general manager of desktop systems unit, agreed. "Less time spent on maintaining IT and having the optimal infrastructure and network are mitigating factors in enabling SMBs to concentrate on their business, instead of spending a disproportionate amount of time managing IT," Mark said in an e-mail interview.
Seah Kwang Leng, HP's Asia-Pacific and Japan marketing manager for enterprise storage and servers, added: "SMBs must focus on gaining competitiveness through innovation by decreasing investments toward maintenance during these tough times, so that they will be on the forefront when the economy picks up again."
By making the most of their technology resources, Seah noted, SMBs can boost efficiency, reduce operating costs and still be able to respond to new business needs.
How to play it smart
Intel's Phukan said the J. Gold research showed that companies can save about US$150 per machine on failure costs over three years, by securing a three-year extended warranty, rather than just a one-year. Lenovo's Lee added that PCs that come bundled with self-management tools can extend the returns companies get on their investments. "Look for SMB-centric services bundled with your hardware," he said. "For example, a unique challenge for SMBs is the lack of dedicated IT staff to set up and manage their IT needs. Services are available that give SMBs similar functionality that IT departments in larger companies enjoy, and SMBs would do well to look into these when shopping around for technology." He added that SMBs can buy notebooks suited up with software that help with everything, from data recovery to simplifying Internet connection.
In addition, HP's Mark suggested that smaller businesses consider replacing their old machines in phases. That said, such a replacement strategy needs to be consistent with meeting the SMB's specific business needs, and must also be aligned with its IT or PC depreciation policy, he added. SMBs should always consider prioritizing IT investments that enable the business to reap cost reductions and help lay the groundwork to emerge stronger from the current environment, said Mark. Lee noted that a phased replacement strategy allows companies to maximize the returns on each batch deployed and helps minimize collective downtime. Conversely, though, phased replacement means evaluating multiple batches of hardware for depreciation. Dell's Khoo noted that having a well-thought out transition plan for hardware replacement offers SMBs financial flexibility as well as business continuity. "Replacing old machines with highly efficient equipment in phases prevents unnecessary strain in their budgets, while allowing them to avoid downtime that costs money," he said.
Social networks offer SMBs marketing power
Small and midsize businesses (SMBs) should consider social networks as an extension of their overall marketing communications strategy, but not without first understanding how audiences relate on these new platforms.
Steve Hodgkinson, Melbourne-based research director of Ovum, said social networks offer SMBs a rich and dynamic source of ideas, feedback and interaction with actual and target customers. Tom Cheong, Cisco Systems' managing director for Singapore and Brunei, described social platforms as "part of the arsenal of tools SMBs have at their disposal when conceptualizing and executing marketing activities". These networks create new avenues for companies to build "conversations" with customers, Cheong said in an e-mail interview.
But, he noted that while there are many cost-effective and free social media tools SMBs can use to expand customer relationship, these businesses must first understand how audiences are actively participating on the social platforms. Hodgkinson explained in an e-mail interview that the most cost-effective way for SMBs to harness the power of social networking is simply to participate in existing networks as members. This will allow the companies to observe the likes and dislikes of network members, their language and behaviors, as well as provide an opportunity for SMBs to observe the competition. "[Regardless], participation needs to be authentic," the Ovum analyst advised. "Avoid 'snooping' under an alias as this can [result in a backlash on] your brand if you are 'outed' and the network resents the breach of trust."
When the SMB develops the skills to participate in social networks, it can choose to be more proactive by initiating dialogs to test product and service ideas. It can also join discussions on customer needs that were unaddressed or product and service frustrations. "The golden rule is to be authentic," Hodgkinson noted. "Many social networks tolerate, and even appreciate, the active participation of company representatives on their networks--but only if they play by the rules. The tone of contributions is critical [as] people react very negatively to 'corporate speak' in social networks." However, since straight advertising on social networks can prove more risky, SMBs need to assess such forms of marketing carefully before embarking on them, he added. "The trick is to tune into the flow of dialog in a way that addresses the needs and priorities of the network community, rather than the advertising schedule of the company," he explained. "The ultimate expression of the art is to create a viral campaign that builds into its own community of followers."
Monitor, then tweak
Cheong advised SMBs to keep track of what has worked for them when they used social networks for marketing, and to strive to improve or amend initiatives that did not produce desired results. Esther Quah, director of corporate communications and brand management at Datacraft Asia, said for SMBs to successfully leverage social networks for marketing, they need to provide content that customers find relevant. "They need to deliver it in a conversational--that is, 'human'--way using terms their customers are familiar with," Quah said in an e-mail interview. Social networks should not be regarded as just another venue to sell or market products, she stressed. "It's all about people and that's why it's called social media, not marketing media," Quah said.
Just as it is for any other marketing strategy, Hodgkinson urged SMBs that use social networks to determine both opportunities and threats these new platforms present to the company's brand. "As in all things, you get out of it what you put in," he said, noting that there are thousands of social networks, ranging from general platforms such as Facebook and Ning, to more specialized networks such as the Social Psychology Network or LastFM. The key, Hodgkinson said, is to understand the different niche communities and their interests by doing background research, for example, via analysis of traffic, search terms, tags, groups, industries and topics. Following that, SMBs should then design focused marketing efforts that achieve a positive outcome in each specific network, he added. The ultimate aim is to engage the customer in dialog around the SMB's brand, he said.
Choose the right networks
In addition, different social networking sites are better suited for different types of promotional activity, said Ang Chye Hin, Asean director of sales for SonicWall. The security vendor, for example, uploads videos on YouTube and has its own channel on the video-sharing site. Corporate videos hosted on the site are targeted at SonicWall's channel partners and customers, explaining how they can make best use of the vendor's products, Ang explained in an e-mail interview. Other clips offer best practices and tips on topics such as telecommuting, he added. "YouTube is free--one only needs to factor in the cost of putting the video together," he said. "They can harness the video-sharing site to educate their audiences in a visual manner, possibly achieving the same type of results as a face-to-face demo offers."
YouTube's comment and feedback function also enables viewers to respond to the videos. Ang said: "We have had viewers offer their thoughts on our products in this manner [so] we can interact with the viewers via this tool."
SMBs will also appreciate the free tracking tools that YouTube's Statistics and Data function provides. This lets an SMB that uploads a video know whether its video is popular and how many other sites have provided links to that video, Ang added.
Facebook and Twitter, too, are useful tools to reach out to customers in a personalized and customized way, or what Ang describes as "one-to-one marketing". Hodgkinson noted that microblogging site Twitter, serves as a platform for short messages and mainly for promoting links to a Web site. As for Facebook, Quah said it can be used for publicizing events, press announcements and sharing videos and photos. When used effectively, social media can be a productive marketing channel, she added. It helps SMBs gain insight on their customers. Despite the availability of customer surveys, she said that some of the most interesting and progressive market research can be found within the social communities where an SMB's customers interact, share information and make recommendations.
SMBs yet to make right IT investments
The ability to make calculated decisions on how to invest IT infrastructure dollars is imperative, amid the economic downturn, for the survival of small and midsize businesses (SMBs), observers say.
Lloyd Parata, Asia-Pacific vice president of Global 360, noted that owners of typical small businesses mainly worry about customers and cashflow, rather than IT system upgrades. In fact, SMBs across the Asia-Pacific region fall short when it comes to investing in IT security, storage and process applications. Global 360 is a provider of process and document management applications. As a result, issues start to appear when these companies grow, Parata said in an e-mail. "The more customers they have, the more administration work is created, so they need more staff," he said, adding that maintaining the growing customer database chalks up more operational expenses.
At this stage, Albert Koh, Asia-Pacific general manager of InfoPrint Solutions Company, said decisions take longer to make and this impedes the SMB from growing not only in the region, but even within a single country. Ross Hammond, managing director for Emerson Network Power Singapore, said investing wisely in IT is as much of a returns on investment (ROI) issue, as it is of affordability. "Like many large companies, SMBs depend heavily on IT," Hammond said in an e-mail. "Where they differ from large businesses is their reluctance to recognize the potential impact of IT infrastructure failure on their core business service." For an SMB to understand what is required, specifically for its IT infrastructure, it must first determine its core operational values, service levels required and the potential impact of downtime, he said. "This is followed by a discussion that connects Capex (capital expenditure) and Opex (operating expenditure) for a total cost of ownership that delivers the IT services the business requires, and that the business can afford over the duration of the service," Hammond said.
Global360 observes that SMBs are often in "constant struggle with cash flow", according to Parata. "Implementing effective cash flow management strategies is important to protect their bottom line," he said. "They have to set goal-oriented budgets and proactively manage them, and have to look into improving and creating a stream of cashflow to protect themselves against foreseen and unforeseen impacts of the downturn."
SMBs find these requirements difficult to address because they lack the automated processes to help them manage their business, he said. Instead, they rely on spreadsheets or paper-and-pen to manage their accounting, Parata said. InfoPrint's Koh added that the manual paper-based processes SMBs are accustomed to also get in the way of information-sharing, making it difficult for these businesses to expand. The absence of a computerized common information platform makes it tough for SMBs to execute both local and regional business strategies, he said. "Employees may find it hard to access information when the company is in the expansion phase, as knowledge is stored in files chucked away in cabinets," he noted. A computerized document management system can facilitate an SMB's expansion by allowing the company to leverage automated information and document workflow across its entities in the region. "Hence, for staff, information is readily available and decision-making is greatly accelerated through a workflow solution," Koh said.
Some vendor help
According to Hammond, many SMBs today demand the same level of availability as large enterprises. This presents an opportunity for vendors to work closely with channel partners to ensure their product and solutions portfolio is geared to meet an SMB's challenges, he said. This can also ensure their approach to solving the SMB's problems is in tune with its scale and specific business challenges, he added. Koh noted that since SMBs do not have large sums of capital to make huge IT investments, vendors should work together to provide managed services that can drive ROI and business value, thus, enabling SMBs to ease into the use of various IT applications. "The business case should involve cost-saving solutions and a business transformation to allow SMBs to justify going into a long-term contract with a service provider," he said.
Fundamentally, said Sean Browning, Asia-Pacific partner sales director of Webtrends, IT vendors need to be more transparent about their capabilities and position within their customers' ecosystem. "The position of an all-in-one suite of products that serves all your needs as a buyer is a farce," Browning said in an e-mail. "Two businesses operating in the same industry, creating similar products, will most likely have unique business processes that are unique to their operations."
As such, the IT vendor community "has the burden-of-proof to explain and show how their solutions contribute to their customers' business practices, as opposed to injecting unnecessary and unwanted change on their customers", he said.
Plan IT purchases carefully ahead of upturn
The recession has forced small and midsize businesses (SMBs) to put spending under heavier scrutiny. But while these companies can delay some IT purchases, not all technology acquisitions can be put on hold until the economy recovers, experts say.
Michele Caminos, outsourcing and IT services research vice president at Gartner, said SMBs cannot afford to cut back mission-critical services contracts, security and other applications that will impact their business in terms of revenue or compromise brand or customer loyalty. Avneesh Saxena, IDC's Asia-Pacific group vice president of systems, storage and software research, said spending on infrastructure software remains a key priority of SMBs. Infrastructure software includes operating systems and utilities built to help SMBs manage, and if necessary, automate some of their infrastructural assets such as servers, storage and networking equipment.
"They have to upgrade, they have to make sure they buy the latest stuff that will help them do things more efficiently as well as manage their complex environments," Saxena said in a phone interview. If an SMB determines there is redundancy within its IT environment, it can invest in certain tools that will help the company use its existing systems more efficiently, Saxena said. Such tools will improve systems utilization through better management so that there is less downtime, he said. For SMBs that have had to reduce IT headcount, the management capabilities in these software can also help the company better cope with the loss of staff.
Caminos told ZDNet Asia in an e-mail that SMBs in mature markets were also spending on business intelligence (BI). "This is to extract additional value from their investments in enterprise applications and data warehouse. So we continue to see a push to BI," he noted. Saxena concurred that medium-sized companies, typically those with over 500 employees and that are seeing growth, do need better access to information. "They have to do something about their analytics or BI, [and] are more open...to invest in some of those," he said. However, Saxena added, BI and analytic tools are a luxury for some smaller firms that cannot justify the investment simply to growth. Both analysts believe SMBs can defer certain hardware upgrades.
This is particularly relevant for desktop upgrades, Caminos said, but noted that servers require careful evaluation. "Although the replacement cycle can be lengthened, they need to evaluate the long-term cost to the organization," she added. Saxena said such deferment should not be long-term measures but based on a 12- to 16-month time span.
When good times come again
SMBs should also prioritize their spending in terms of what hardware and software tools can help drive their business. Caminos said: "If the benefit can be quickly realized, and the cost is in line with budget, then it may move forward." She added that businesses of all sizes have to be careful when deciding how they plan to reduce IT spending. Compared to the downturn in the early 2000s, when the dot-com bubble burst, businesses today are implementing more IT tools. They are more reliant on technology now than they were seven or eight years ago, she noted, adding that this makes decisions on spending cuts tougher to make.
Saxena noted that SMBs that make the wrong decisions will not be able to build to the required scale quickly when the market turns around, and this would be a "huge problem" for them. There would be a time lag before these companies are able to reap the opportunities afforded by an economic rebound. If a small or midsize company is not doing much to prepare for the turnaround, it would then be difficult for the company to leverage the benefits, the IDC analyst said. However, he added, experience with past recessions in the Asia-Pacific region will prove valuable for these companies. "They probably understand what risks they will run into [if they are] not able to invest more today. It probably is an opportunity cost many of them feel they can forgo or deal with, and [instead] try to focus on controlling costs [for now]," he said.
Once the economy turns around, SMBs that have the products ready for customers will take advantage of the situation, while the rest would likely come through in the next nine or 10 months, said Saxena.
India's SMBs to spend US$291M on security in 2009
Small and midsize businesses (SMBs) in India will spend US$291 million on security-related investments in 2009, said AMI-Partners.
In a study released Wednesday, the analyst firm reported that security software accounts for 73 percent of the total SMB security expenditure. Abhilash DB, an AMI-Partners analyst, said in the report, most of this amount is spent on antivirus software. "Security for small businesses is confined mainly to the deployment of an antivirus solution and the majority of them lack proper processes and policies for security management," said Abhilash. The data explosion, electronic threats and increased use of Web-based offerings are some of the "triggers" for the adoption of security products, he added. India's SMBs have realized that data security is not only about adopting security products but also formulating structured policies.
Managed security services (MSS) was identified as one of the key trends in the SMB security space. AMI-Partners expects the MSS market to grow 21 percent this year. But, AMI-Partners said, the main challenge of service providers will be to convince SMBs to trust external organizations to handle their internal security. The research firm however foresees greater traction in this space once SMBs start to realize security is better managed by MSS providers, as compared to generalists in their IT departments.
Another trend is the increasing adoption of unified threat management (UTM). Adoption will increase as SMBs look for a proactive and unified approach to securing IT infrastructures, according to Abhilash. AMI-Partners identified SMBs as the most vulnerable segment in terms of data security as they lack expertise to handle cyber threats, the number of which has been increasing. Information security has also become significantly important with businesses showing a rising dependence on Web-based enterprise offerings and the sharing of critical data on corporate networks.
Demand by Indian SMBs for traditional security products such as antivirus programs is falling, while antispyware and antispam will experience 26 percent growth in demand from such companies in India this year. Basic security offerings such as network firewalls and IDS/IPS (intrusion detection system/intrusion prevention system) will also show significant growth among these businesses.
